I have a GC who owes me about $20,000. They said they will pay Mt. Carmel Construction (me) about half and "bond out" the balance. What does "bond out" mean?
1 reply
Dec 13, 2019
I'm not entirely sure what a contractor might mean when referring to "bonding out" a balance. If a mechanics lien has been filed on the job and the contractor is threatening to "bond off" the filed lien - that would refer to them transferring the filed mechanics lien to a surety bond in order to discharge the lien claim from the property title. And, as Levelset discusses in the following article, threats to bond off a mechanics lien claim shouldn't be all that scary: Don’t Be Afraid Of Threats To Bond Off Your Mechanics Lien: Explaining Mechanics Lien Bonds.
Alternatively, maybe they're referring to the ability to make a claim on a bond they've secured - either a payment bond or license bond. Claimants can often look to either type of bond for payment protection, when one is present.
I hope this was helpful! For additional reading, I think this resource will be valuable: Why Customers Don’t Pay and What To Do When It Happens.